Company Income Tax Rates

The general income tax rate for both public and private companies is 30%.

Announced as part of the Federal Budget 2015 and now lawfrom 1 July 2015 the tax rate for Small Business companies is 28.5%. Small Businesses are those with aggregated turnover of less than $2 million.

The new law keeps the maximum franking credit at 30%, however in practice the extent of franking will be limited by the franking account balance. Small business companies in due course will have lower tax credits based on the 28.5% rate. This article explains the franking account implications in more detail.

The tax rate for a Public unit trust is also 30%. For Fringe Benefits Tax rates – see  FBT

Also announced in the budget was a tax discount of 5% up to a maximum of $1,000 applied as a tax offset for individuals with income from an unincorporated Small Business. For progress of enabling legislation see Tax Laws Amendment (Small Business Measures No. 3) Bill 2015

See also: Budget 2015 and Small Business Concessions

PM confirms tax cut for Small Business only
Budget Update 2014
2013 Policy Developments

Other entities tax rates:

  • Life Insurance companies – ordinary: 30%
  • Complying superannuation funds: 15%
  •  Non-profit bodies are exempt from tax on their mutual income. Non-exempt bodies are taxable on their non-mutual net income at the following rates:

Non-mutual Income Tax
 First $416 of taxable income Nil
 $417 to $915 55%
 $916 and above 30%

 


Exploration Development Incentive

The Exploration Development Incentive (EDI) enables exploration companies to apply exploration tax losses towards tax credits for shareholders. Australian resident shareholders that are issued with an exploration credit are entitled to a refundable tax offset or additional franking credits.

Eligible companies must notify the Tax Office of estimated eligible exploration expenditure by 30 September.

For further information from the Tax Office, see:


Company tax loss carry-back scheme..

Legislative amendments to remove the carry-back availability from 2013-14 are included with the Mining Tax repeal measures and took effect from 30 September 2014. See MRRT Repeal Measures Bill.

The ATO has provided for a “no-penalty” administrative treatment for companies which may have already claimed for 2013-14 in accordance with the then-existing law. Tax assessments will be adjusted by the Tax Office to reflect the repeal with effect from 1 July 2014 or for late balancing companies from their 2012-13 year. See more information here.


Large Companies – revised timing of tax instalments

From 1 January 2014 corporate tax entities are required to make PAYG income tax instalments monthly rather than quarterly if they are over the specified turnover thresholds. These changes were foreshadowed in the Treasurer’s 2012 MYEFO.

  • Companies with turnover of $1 billion or more
    will remit their PAYG company tax instalments monthly from 1 January 2014.
  • Companies with turnover of $100 million
    will commence monthly payments  on 1 January 2015.
  • Companies with turnover of $20 million or more
    will commence monthly payments  on 1 January 2016.

These proposals will also impact all other entities including super funds, trusts and individuals:

  • Entities with turnover of $1 billion or more
    will commence monthly payments  on 1 January 2016.
  • Entities with turnover of $20 million or more
    will commence monthly payments  on 1 January 2017.

For further information: See  Monthly PAYG instalments


See also

Further information

doc-word Company Tax Return checklist – CPA Australia

doc-word  Company checklist © ICAA and Thomson Reuters

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This page was last modified on 16 July 2015